ROME (Reuters) -Italy’s tax police have seized almost 84 million euros ($90 million) from GXO Logistics’ Italian unit following an investigation into alleged tax fraud, prosecution documents showed on Tuesday.
In a 154-page decree, the Milan Prosecutors’ Office accused the U.S. logistics giant of circumventing labour and tax laws, relying on cooperatives or limited liability companies that supplied workers while omitting tax and social security payments.
A GXO spokesperson confirmed the company was under investigation in Milan over its “relationship with certain cooperatives”, and was “actively cooperating with the public prosecutor”.
“GXO fully complies with all applicable laws (…), has rigorous controls and procedures in place,” and directly employs thousands in Italy, representing the majority of its staff in the country, the spokesperson added.
Prosecutors said GXO Italy, sometimes using intermediaries acting as filters, used “bogus procurement contracts for the provision of services” with these cooperatives or companies that were a front for cheap labour, and made false tax declarations.
Prosecutors denounced it as a “fraudulent” business model that “facilitates the exploitation of workers and results in unfair competition”, adding it has been common malpractice in Italy for years, if not decades.
Similar investigations on irregular hiring schemes have targeted other large businesses in recent years including global delivery groups DHL and GLS, German logistics firm DB Schenker and Italian supermarket chain Esselunga, Milan prosecutors said.
($1 = 0.9334 euros)
(Reporting by Emilio Parodi, Writing by Alvise Armellini, Editing by Susan Fenton and David Evans)
